I would go with the cement siding as it will be the most stable and it will not rot like the wood or engineered wood. I like to see siding finished on site as that way you know what product is used. As far as painting the siding I would do a full exterior acrylic primer coat and follow it with two coats of an exterior acrylic house paint and be sure to get the best product that the paint store carries. The best finish coat will not cost that much more but will last a few years longer.